The Custom-House

Pentagon terror futures market The

Pentagon terror futures market

The Pentagon's experiments with a futures market to organize information on future terror acts wasn't as hair-brained as sometimes portrayed. Arnold Kling links to several bolg postings or newspaper columns that are relatively favorable, here: "Terrorism Futures". A link to a Hal Varian column in the New York Times may not last long, but here is a link to the same column on Varian's home page: "A Good Idea With Bad Press". Mark A.R. Kleiman is disappointed in the politicians who demogauged this idea to death, and points to the chilling effect this will have an innovation in the office that developed the idea:

"But even if the proposal had been more flawed than it was, using the laughter which is as the crackling of thorns under a pot, plus fake moral outrage, to shut it down was a terrible mistake. The proposal came out of the Defense Advanced Research Projects Agency. As my friend remarked, "This might or might not have been a stupid idea, but if DARPA isn't doing some stupid things it's not doing its job." The next DARPA whiz-kid who comes up with an off-the-wall idea now has to worry about his boss saying "No, we don't want to get burned again the way we did with terror futures." "

Kleiman's column is here:"MARKET IN TERROR, R.I.P"

Custer's Last Stand story What

Custer's Last Stand story

What happened to the 7th Cavalry trooper who carried Custer's request for reinforcements as the Little Big Horn battle began on June 25, 1876? He served in the Spanish American War, worked on the New York City subway, and died in 1922 after being hit by a beer truck. The New York Times has the story, here: "Custer's Bugler, Playing the Subway?"

Thanks to Cronaca for the link.

The terrorist supply curve ParaPundit

The terrorist supply curve

ParaPundit points to a Washington Post story with evidence that the opportunity cost for engaging in terror attacks on U.S. troops is increasing, shifting the supply curve up and to the left, increasing price (from $300 per murder a few weeks ago to $5,000 now). Here: "Better Intelligence Info Supports Higher Tempo Of US Operations In Iraq "

States deficits a drag on

States deficits a drag on recovery

The state budget crisis is slowing down the economic recovery according to Louis Uchitelle in a story in today's New York Times:Red Ink in States Beginning to Hurt Economic Recovery

"The numbers are hard to add up, but even the most optimistic accounting has state spending slowing sharply while tax rates rise along with a variety of fees...

..."It is reasonable to think that the response by the states to the fiscal crisis is taking at least half a percentage point out of the growth rate of the national economy," said Nicholas Johnson, director of the State Fiscal Project at the Center on Budget and Policy Priorities in Washington. The annual growth rate has averaged 2.6 percent for the last 15 months."

Internet reduces transactions costs, encourages

Internet reduces transactions costs, encourages barter

Today's New York Times carries a story by Warren St. John on the vogue for bartering: Let's Make a Deal: Barter in a No-Cash Economy. Nice overview of the tradeoffs of barter vs. cash transactions. For example, barter is somewhat more information intensive that cash transactions:

"Many of the ads [posted on Internet barter pages - Ben] are not for goods, but for professional services like Web design, housecleaning and massage. Other service industries are represented as well. Last week on Craig's List, a dominatrix offered to trade her services (along with "dungeon rental") for plane tickets, carpets, tiling work and an antique couch.

Reached by telephone, the dominatrix, who asked not to be identified, said she had traded successfully for an accountant, movers and housecleaners. She had this advice for prospective barterers:

"You need to be incredibly specific in your ad � spell it out like you're talking to a child. Otherwise, your mailbox will be flooded with stupid questions." "

Alaska's state pension fund stressed

Alaska's state pension fund stressed

Tom Moran of the Fairbanks News-Miner reports that the falling stock market, and rising health care costs, have left the Alaska Public Employees Retirement System a little short, here:Alaska's pension fund short Municipalities may have to fill gap

"According to the most recent numbers, the fund in which the state holds its employees' pension money--as well as that of the scores of communities and groups that subscribe to its pension plan--is almost $2.5 billion short, chiefly as the result of skyrocketing health-care costs combined with the market woes of the last few years. The state's teacher retirement fund is also about $1.7 billion short of the money it needs to fund retirement benefits.

To deal with the deficits, the state plans to dramatically increase the amounts that communities and other entities will have to contribute to the plans, adding to the problems many already face due to the loss of state revenue sharing..."

Brad DeLong population postings I'd

Brad DeLong population postings

I'd like to draw your attention to three new postings on population growth at Brad DeLong's web site. The first, Crude Life Expectancy Estimates leads off with a striking figure reminding us how radically different the times we live in are from all of those that have gone before. Given the scales used, the estimated average world life span is almost flat in the low 20s from 0 to 1800 AD and then shoots upward almost vertically, reaching the mid-60s in 2000. The idea that the natural life span for a man or woman is 60-70 years, would not have made sense to anyone before the last century.

The figures are also broken out by country and region in a second figure. I note that, while India and Africa appear to be at the bottom at any point in time, life spans in both have risen in this century from the area of 20 years to something on the order of 60 years - almost a three fold increase in life spans in a hundred years. I posted a few days ago on the economic stagnation and decline in sub-saharan Africa since 1975. DeLong's figures appear to be based on data points in 1950 and 2000 and would not show a decline since 1975 unless it was greater than the increase from 1950 to 1975. Russian life spans, which rose rapidly between 1900 and 1950, essentially flattens out between 1950 and 2000 - in this respect behaving differently from those in any other region.

You could skip the second posting, because it's gist is repeated at the start of the third. DeLong leads off with a figure showing the relation between income and population growth since 1820: "The Demographic Transition". Population growth rates rise with income up to somethign on the order of $1,100 (1n "1990" dollars) and then more or less levels off. Once incomes reach $4,000, population growth rates begin to decline.

The third posting, "Notes: In the Shadow of Malthus" contains the argument and the punchline. DeLong's income and growth figure leads him to conclude that a population with an income level of $660 would be growing at an annual rate of something like 0.2% or so. A chart of estimated world human population growth rates since 2,500 BC suggests that it wasn't until about 1800 and after that population growth rates exceeded this level. His conclusion, before 1800 humans lived on something like $660 a year. I don't have an intuitive feel for the dollar measures, so I have difficulty visualizing what this means. DeLong offers this assistance:

"What held back population growth? What keeps the numbers of the human race from growing at more than 0.2% even under the most favorable pre-industrial conditions? The conclusion seems inescapable: desperate poverty. For the overwhelming bulk of recorded history, population growth rates have been kept low by poverty so dire that women's fat reserves are so low that ovulation is a hit-or-miss affair, and by poverty so dire that nutritional deficits are so great as to seriously compromise immune systems' abilities to deal with the endemic disease pool."

P.S. (7 pm): DeLong follows up with this pointed and not unrelated post:"The Good Things in Life" -

"Wendell Berry comes out foursquare in favor of the good things in life: short life expectancy, chronic malnutrition, plague, and poverty..."

Alaska Municipal League prefers income

Alaska Municipal League prefers income to sales tax

Timothy Inklebarger reports on this week's joint meetings of the Alaska Municipal League and the Alaska Conference of Mayors in today's Juneau Empire, here: JuneauEmpire.com: State & Regional: Cities to push income tax 07/25/03

Alaska has to do something, as its financial reserves dwindle year by year. The legislature almost adopted a sales tax this past Spring. But the League would prefer an income tax. A state sales tax would compete with city and town sales taxes. Kevin Ritchie, the League's executive director pointed out that revenues from an income tax would come from non-residents to a greater extent - both because of payments by out-of-state workers, and because of Federal tax deductions.

Inklebarger quotes Governor Murkowski's aide John Manly, who says the Governor favors a sales tax solution and would likely veto an income tax.

"Murkowski spokesman John Manly said the governor has made it clear that he does not and will not support an income tax on philosophical grounds.

"You are taking away money that one person earned to provide services that another person thinks they need," Manly said, noting that Murkowski likely would veto an income tax bill if one passed the Legislature.

"It's an old debate that centers around class warfare," Manly said. "They think rich people shouldn't be able to get rich. ... If they think that's progressive, I guess I don't." "

This seems a little over the top; no one is arguing for a confiscatory tax program.

An Ashcroft joke At Mark

An Ashcroft joke

At Mark A. R. Kleiman's blog, here: "A STORY MAKING THE ROUNDS, REPORTEDLY FROM PLAYBOY".

Stuart Buck's cognitive biases Stuart

Stuart Buck's cognitive biases

Stuart Buck reports on his emotional response to alternative motel/breakfast pricing schemes, here: "Another Economics Puzzler".